International trade is the backbone of a strong global economy. Having international trading partners helps open a country’s businesses to new markets, including Canadian firms looking to branch out into the global marketplace. In fact, Canadian exports accounted for a little more than 32 percent of the country’s GDP in 2018. Recent statistics indicate that international trade accounts for 2.9 million jobs domestically as well, comprising nearly 17 percent of all jobs within the country.
The impact of international trade on economic growth is staggering. Businesses that have yet to embark on an international business strategy have plenty of reason to do so, even if there are several critical questions that have to be answered first. Understanding how to find the right market, develop the right regional and local plans and familiarizing ones’ self with the legal implications of international trade are but a few of the many questions every business owner should consider when creating their strategy.
Key Strategies for International Trade Game Plan
Developing an international trade strategy can be a significant undertaking for a business of any size. Developing one for a small business, therefore, poses several unique challenges. The core of any global strategy for trade has to focus on seven key concepts:
Any successful plan for international trade has to start with a high-quality, unique product. Copying what is already available on the market will prevent newcomers from carving out space, as existing players and domestic manufacturers overseas have the advantage of being incumbents. The right product makes a massive difference when it comes to trade opportunities abroad.
Building a global strategy means conducting extensive market research. Small businesses should be ready to do their homework: this means deeply diving into the nuances of the market opportunity under consideration, sizing up international and domestic competitors, assessing product demand, and developing the unique business proposition that makes it worthwhile to build an international operation.
Supply Chain Logistics
Supply chain considerations, such as management and logistics, take on increased importance when entering into global trade. Whether you’re exporting goods directly from Canada or instructing overseas manufacturers to deliver goods to new geographic locales, you’ll have to build a robust supply chain with as few weaknesses as possible. Ensure that your current partners can support steady shipments to international clients and outposts. Failure to do so may create significant issues when filing early orders as your business begins to gain traction in its new location.
International Law Compliance
Legal considerations for international trade may involve three different sets of rules and regulations: domestic laws in a country’s home base, laws in the country where you’re looking to set up shop and international laws that govern global trade. Compliance with all three of these sets of standards requires steadfast adherence to guidelines as well as the dedication to keep up with frequent changes. Bringing in a strong legal team that understands the ins and outs of compliance is paramount. Consider hiring local assistance in the country you plan to export to as well, as they will be in the best position to provide advice on changes as they happen.
Finding local partners to help with last-mile logistics and sales is also key. Whether you plan to establish offices in other countries or simply want to expand where you do business, having a network of trustworthy contacts and partners can make an otherwise difficult process slightly less challenging. Good local partners can help guide businesses through the quirks and challenges that come with operating in a brand-new location.
While building connections with local entities, be sure not to overlook local resources that can help you with your international ambitions. CanExport is an outstanding resource for small- and medium-sized businesses looking to get guidance (and even financial help) for getting their international operations up and running. The Canadian government also offers other helpful tips and tools designed specifically for businesses looking to enter new markets, which can also be a great resource.
Any international trade strategy is only as strong as the team behind it. Your company’s staff needs clear, actionable guidance in order to successfully bring your business to new markets. Hiring the right talent—ideally candidates with experience in exports—and fostering internal growth can make an ambitious, potentially capital-intensive initiative easier to roll out.
The benefits of international trade on economic growth for businesses outweigh the challenges and work involved in getting started. Although there are myriad factors that have to go into a robust, successful international business line of business, handling them with the right frame of mind makes a major difference.
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.